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Shyam Ltd has announced issue of warrants on 1: 1 basis for its equity share holders. The Exchange ratio is 1.00. The current market price of the stock is ?10 and warrants are convertible at an exercise price of ?11.71 per share. Warrants are detachable and are trading at ?3. What is the minimum price of this warrant?

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Business Valuation syllabus (Weightage: 50%):
1. Business Valuation Basics
2. Valuation in Mergers and Acquisitions
3. Fair Value in Accounting Measurement
3. Valuation of Intangibles

Related Test: CMA Final Exam: Strategic Performance Management


Shyam Ltd has announced issue of warrants on 1: 1 basis for its equity share holders. The Exchange ratio is 1.00. The current market price of the stock is ?10 and warrants are convertible at an exercise price of ?11.71 per share. Warrants are detachable and are trading at ?3. What is the minimum price of this warrant?






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